The role of insurance and limited liability on corporate insolvencies

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Show simple item record Camino Blasco, David
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía de la Empresa 2010-03-01T10:43:47Z 2010-03-01T10:43:47Z 1995-01
dc.description.abstract The current recession has been accompanied by an unprecedented rise in the incidence of default on loans and companies' insolvencies. This paper seeks to clarify the reasons for this level of default, relating them not only to the general economic conditions and the state of private sector balance sheets but also to a range of factors such as the role that limited liability and several forms of insurance contracts play in companies' failures. In particular, due to asymmetric information and 11 moral hazard 11 problems limited liability seems to favor insolvency. However, the use of credit insurance is likely to reduce the cost of capital and thus the probability of default, as insurance companies are better suited for screening and monitoring functions.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries UC3M Working papers. Business Economics
dc.relation.ispartofseries 95-03-02
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.subject.other Corporate finance
dc.subject.other Managerial accounting
dc.subject.other Insolvencies
dc.subject.other Limited liability
dc.subject.other Credit insurance
dc.title The role of insurance and limited liability on corporate insolvencies
dc.type workingPaper
dc.subject.eciencia Empresa
dc.rights.accessRights openAccess
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